While global online sales are projected to grow by 4%, reaching $1.19 trillion in November and December, U.S. sales are expected to grow only by 1%, totaling $273 billion. To counter the sales slowdown, retailers are turning to AI-driven product recommendations, which are predicted to influence $194 billion in online sales during the holiday period.
According to a holiday forecast by SalesforceCRM, e-commerce retailers will need to use strategies such as the AI product recommendations to succeed in the upcoming holiday season, including offering discounts, implementing customer-friendly return policies, and utilizing predictive and generative AI tools.
The forecast is based on data from the Salesforce Shopping Index, consumer surveys, and other research.
Key predictions from the report include:
- With online sales slowing, and consumer confidence shaky, retailers will have to work harder to win sales.
- Holiday discounts are expected to start earlier, with Amazon’s October Prime Day expected to cause retailers to start offering their deals in early October. Discounts are expected to peak at 29% during Cyber Week.
- Return policies will impact sales. Retailers with return windows of 30 days or less will see 7% fewer online sales in October and November. Poor return experiences and unpopular return policies will put 21% of online sales at risk.
- Buy Online, Pick Up In Store (BOPIS) orders will drive $28 billion in incremental sales during the holiday season.
- Social ads will drive ten times more traffic than traditional marketing.
- Resale items will account for 17% of holiday gifts this year, as consumers embrace resale to save money and reduce waste.
- Over the last 12 months, 13% of online orders were influenced by AI. Ten percent of shoppers say they will use generative AI to get inspiration for holiday gifts this year.
Despite a plateau in digital growth, a balance between online and offline shopping is observed, with hybrid shoppers using various touchpoints in their shopping journey. Additionally, store workers are increasingly involved in fulfilling online orders through different methods such as curbside pickup and in-store pickup.
Forbes.com, Joan Verdon